Whole document restricted, see Access Instructions file below for details of how to access the print copy. Subscription resource available via Digital Dissertations / My research question is: Why do countries with similar rates of saving differ in economic growth? My thesis addresses this question by formulating an endogenous growth model using the Cobb-Douglas production function. My model disaggregates the rate of saving into the retention ratio and the household saving ratio and connects these ratios with three new parameters representing respectively the efficiency of financial institutions, the decision-making of managers, and barriers to technology diffusion. These three financial parameters make it possible to distinguish between quantitative and qualitative investments and to measure the growth rates of output, capital, and technological progress. Endogenous growth in technology neutralizes diminishing returns to capital. The Cobb-Douglas production function assumes diminishing marginal productivity under constant returns to scale. My model, however, measures the growth rate of per capita output under the balanced growth state/constant returns to capital situation. This situation is guaranteed when the relative share of profit is within the critical relative share of profit. A set of combination of the three financial parameters holds under diminishing returns to capital, yet the diminishing returns to capital situation turns to the balanced growth state situation by using delta defined as the elasticity of quality improvement with respect to effective labour units attached to a machine. An extreme case corresponds with the Solow and O'Connell (including Harrod-Domar) models, where the three financial parameters are all 1.0, with no technological progress. Simulation results demonstrate several new fact-findings. These fact-findings come from the characteristics of my model or the relationships between the growth rate of “per capita” output in the long-run (hereunder the growth rate) and the three financial parameters and delta, where the growth rate converges by setting delta = the relative share of profit. First, if the rate of saving increases, the growth rate also increases linearly. This is more definitely evident than the result of Mankiw, Romer, and Weil [1992]. Second, under a fixed rate of saving, the growth rate changes significantly differently if each of three parameters changes: the relative share of profit, the growth rate of population, and the retention ratio. In particular, the change in the retention ratio influences the growth rate positively or negatively depending on the relationship between the three financial parameters that reflect corporate behaviour and the nature of financial institutions. In this respect, I cannot find literature that relates the retention ratio or dividend policy to the growth rate in the Cobb-Douglas production function. Also the change in the growth rate of population does not influence per capita growth at all. This finding is also more definite than that found in the literature. In short, the three financial parameters play an important role in economic growth. When we divide saving into corporate saving and household saving, the rate of saving as a whole is not independent of the growth rate. A proportion of corporate saving and a proportion of household saving are used for investment in quality, which accelerates productivity enhancement. Consequently, the characteristics of the corporate sectors and financial institutions of a country play a significant role in determining its long run growth rate of per capita income (even under a fixed rate of saving).

Whole document restricted, see Access Instructions file below for details of how to access the print copy. Subscription resource available via Digital Dissertations / My research question is: Why do countries with similar rates of saving differ in economic growth? My thesis addresses this question by formulating an endogenous growth model using the Cobb-Douglas production function. My model disaggregates the rate of saving into the retention ratio and the household saving ratio and connects these ratios with three new parameters representing respectively the efficiency of financial institutions, the decision-making of managers, and barriers to technology diffusion. These three financial parameters make it possible to distinguish between quantitative and qualitative investments and to measure the growth rates of output, capital, and technological progress. Endogenous growth in technology neutralizes diminishing returns to capital. The Cobb-Douglas production function assumes diminishing marginal productivity under constant returns to scale. My model, however, measures the growth rate of per capita output under the balanced growth state/constant returns to capital situation. This situation is guaranteed when the relative share of profit is within the critical relative share of profit. A set of combination of the three financial parameters holds under diminishing returns to capital, yet the diminishing returns to capital situation turns to the balanced growth state situation by using delta defined as the elasticity of quality improvement with respect to effective labour units attached to a machine. An extreme case corresponds with the Solow and O'Connell (including Harrod-Domar) models, where the three financial parameters are all 1.0, with no technological progress. Simulation results demonstrate several new fact-findings. These fact-findings come from the characteristics of my model or the relationships between the growth rate of “per capita” output in the long-run (hereunder the growth rate) and the three financial parameters and delta, where the growth rate converges by setting delta = the relative share of profit. First, if the rate of saving increases, the growth rate also increases linearly. This is more definitely evident than the result of Mankiw, Romer, and Weil [1992]. Second, under a fixed rate of saving, the growth rate changes significantly differently if each of three parameters changes: the relative share of profit, the growth rate of population, and the retention ratio. In particular, the change in the retention ratio influences the growth rate positively or negatively depending on the relationship between the three financial parameters that reflect corporate behaviour and the nature of financial institutions. In this respect, I cannot find literature that relates the retention ratio or dividend policy to the growth rate in the Cobb-Douglas production function. Also the change in the growth rate of population does not influence per capita growth at all. This finding is also more definite than that found in the literature. In short, the three financial parameters play an important role in economic growth. When we divide saving into corporate saving and household saving, the rate of saving as a whole is not independent of the growth rate. A proportion of corporate saving and a proportion of household saving are used for investment in quality, which accelerates productivity enhancement. Consequently, the characteristics of the corporate sectors and financial institutions of a country play a significant role in determining its long run growth rate of per capita income (even under a fixed rate of saving).

Whole document restricted, see Access Instructions file below for details of how to access the print copy. Subscription resource available via Digital Dissertations / My research question is: Why do countries with similar rates of saving differ in economic growth? My thesis addresses this question by formulating an endogenous growth model using the Cobb-Douglas production function. My model disaggregates the rate of saving into the retention ratio and the household saving ratio and connects these ratios with three new parameters representing respectively the efficiency of financial institutions, the decision-making of managers, and barriers to technology diffusion. These three financial parameters make it possible to distinguish between quantitative and qualitative investments and to measure the growth rates of output, capital, and technological progress. Endogenous growth in technology neutralizes diminishing returns to capital. The Cobb-Douglas production function assumes diminishing marginal productivity under constant returns to scale. My model, however, measures the growth rate of per capita output under the balanced growth state/constant returns to capital situation. This situation is guaranteed when the relative share of profit is within the critical relative share of profit. A set of combination of the three financial parameters holds under diminishing returns to capital, yet the diminishing returns to capital situation turns to the balanced growth state situation by using delta defined as the elasticity of quality improvement with respect to effective labour units attached to a machine. An extreme case corresponds with the Solow and O'Connell (including Harrod-Domar) models, where the three financial parameters are all 1.0, with no technological progress. Simulation results demonstrate several new fact-findings. These fact-findings come from the characteristics of my model or the relationships between the growth rate of “per capita” output in the long-run (hereunder the growth rate) and the three financial parameters and delta, where the growth rate converges by setting delta = the relative share of profit. First, if the rate of saving increases, the growth rate also increases linearly. This is more definitely evident than the result of Mankiw, Romer, and Weil [1992]. Second, under a fixed rate of saving, the growth rate changes significantly differently if each of three parameters changes: the relative share of profit, the growth rate of population, and the retention ratio. In particular, the change in the retention ratio influences the growth rate positively or negatively depending on the relationship between the three financial parameters that reflect corporate behaviour and the nature of financial institutions. In this respect, I cannot find literature that relates the retention ratio or dividend policy to the growth rate in the Cobb-Douglas production function. Also the change in the growth rate of population does not influence per capita growth at all. This finding is also more definite than that found in the literature. In short, the three financial parameters play an important role in economic growth. When we divide saving into corporate saving and household saving, the rate of saving as a whole is not independent of the growth rate. A proportion of corporate saving and a proportion of household saving are used for investment in quality, which accelerates productivity enhancement. Consequently, the characteristics of the corporate sectors and financial institutions of a country play a significant role in determining its long run growth rate of per capita income (even under a fixed rate of saving).

Whole document restricted, see Access Instructions file below for details of how to access the print copy. Subscription resource available via Digital Dissertations / My research question is: Why do countries with similar rates of saving differ in economic growth? My thesis addresses this question by formulating an endogenous growth model using the Cobb-Douglas production function. My model disaggregates the rate of saving into the retention ratio and the household saving ratio and connects these ratios with three new parameters representing respectively the efficiency of financial institutions, the decision-making of managers, and barriers to technology diffusion. These three financial parameters make it possible to distinguish between quantitative and qualitative investments and to measure the growth rates of output, capital, and technological progress. Endogenous growth in technology neutralizes diminishing returns to capital. The Cobb-Douglas production function assumes diminishing marginal productivity under constant returns to scale. My model, however, measures the growth rate of per capita output under the balanced growth state/constant returns to capital situation. This situation is guaranteed when the relative share of profit is within the critical relative share of profit. A set of combination of the three financial parameters holds under diminishing returns to capital, yet the diminishing returns to capital situation turns to the balanced growth state situation by using delta defined as the elasticity of quality improvement with respect to effective labour units attached to a machine. An extreme case corresponds with the Solow and O'Connell (including Harrod-Domar) models, where the three financial parameters are all 1.0, with no technological progress. Simulation results demonstrate several new fact-findings. These fact-findings come from the characteristics of my model or the relationships between the growth rate of “per capita” output in the long-run (hereunder the growth rate) and the three financial parameters and delta, where the growth rate converges by setting delta = the relative share of profit. First, if the rate of saving increases, the growth rate also increases linearly. This is more definitely evident than the result of Mankiw, Romer, and Weil [1992]. Second, under a fixed rate of saving, the growth rate changes significantly differently if each of three parameters changes: the relative share of profit, the growth rate of population, and the retention ratio. In particular, the change in the retention ratio influences the growth rate positively or negatively depending on the relationship between the three financial parameters that reflect corporate behaviour and the nature of financial institutions. In this respect, I cannot find literature that relates the retention ratio or dividend policy to the growth rate in the Cobb-Douglas production function. Also the change in the growth rate of population does not influence per capita growth at all. This finding is also more definite than that found in the literature. In short, the three financial parameters play an important role in economic growth. When we divide saving into corporate saving and household saving, the rate of saving as a whole is not independent of the growth rate. A proportion of corporate saving and a proportion of household saving are used for investment in quality, which accelerates productivity enhancement. Consequently, the characteristics of the corporate sectors and financial institutions of a country play a significant role in determining its long run growth rate of per capita income (even under a fixed rate of saving).

This dissertation examines whether managers influence corporate boards of directors in their auditor selection, change, and compensation decisions. This topic is important because it addresses concerns that the Sarbanes-Oxley Act of 2002 (SOX) is not effective in eliminating managerial influence over auditor engagement decisions and that it may provide a false sense of security to investors. These concerns are based on the implicit assumption that managers prefer weaker governance oversight and lower audit quality. However, empirical research testing associations between managerial influence and audit-related decisions post-SOX is scarce and generally guided by agency theory. Incorporating agency, stewardship, and resource dependence perspectives, I find that managerial preferences for auditor selection are not aligned. Specifically, CEOs positively influence the selection of higher quality auditors, whereas CFOs have the opposite effect. Further, CEOs who hold powerful roles as chairs of their companies' boards of directors appear to mitigate the negative influence of CFOs and inside directors on audit quality. CEOs serving in dual roles also oppose auditor turnover when lower earnings quality prompt higher demand for audit effort. Finally, my study provides some evidence that management exercises downward pressures on audit fees, suggesting that managers utilize their authority beyond the regulations established by SOX to negotiate auditor compensation.

Online word-of-mouth (WOM) platforms have been referred to by various terms such as online communities, feedback systems, peer reputation systems, or consumer generated media. Such systems provide a global platform for customers to share their experiences, and also rate service providers. WOM systems are burgeoning on the Internet for products such as music and books (Amazon.com), news (Slashdot.org), consumer electronics (shopping.com), tourism and travel (Tripadvisor.com; Hotels.com), and many other products and services. As with the traditional WOM, numerous studies have shown that these systems have a significant impact on customer decision making process, their satisfaction with goods and services, and the overall value of online economic transactions. In this study, the primary focus were the product review systems (PRS). These review systems are less personal but more ubiquitous platforms for online WOM wherein consumers post reviews about the products/services they have consumed. These reviews are widely accessible to other consumers but are disseminated only when other consumer consult these reviews during the purchasing process. However, there are still numerous problems associated with these systems. Recent studies have shown that there are numerous instances of deceptive information provided by service providers themselves or customers who have been paid by commercial parties. Added to this is the problem of anonymity in a computer mediated environment that adds to the already existing uncertainty for the consumer. Further, each review system consists of hundreds of consumer reviews associated with any given product or service. Given that consumers face these numerous problems, research is yet to examine the factors that drive the consumers develop trust in these reviews, and base their purchasing decisions on the information gleaned from the review systems. The main objective of this study was to explore this interesting phenomenon. To this end, this study applied uncertainty reduction theory and Social identity theory to delineate certain aspects of the online reviews that might have an impact on the consumer's assessment of online product reviews. Based on these theories, it was hypothesized that the informational content of the review and social component of the review (individuals' identity information disclosure and the consumers' perceived similarity with this information) have a significant effect on the consumers' trust in a review and subsequently the purchase intention. Further, based on the elaboration likelihood model, it was also posited that consumers' use of these heuristics is more salient while evaluating high involvement products than low involvement products. To test the hypotheses, the study adopted a quasi-experimental design with 2x2 (2 levels each for information content and social component within-subjects) x 2 (2 involvement modes between-subjects) full factorial design. Based on two levels for each of these factors, four reviews similar to those found in sites such as tripadvisor.com were created. A total of 283 students (153 in high involvement mode and 130 in low involvement mode) evaluated these reviews and assigned trust scores as well purchase intention scores to each review. The data was analyzed using linear mixed models and structural equation modeling. The results showed that both the main effects, information content of the review, and the consumers' perceived social identity with the reviewer contribute to an increased trust in the reviews. The study data did not support the hypothesis that involvement of the activity moderates the above mentioned relationships. Within this, information content was found to be playing an important role in both the involvement modes whereas the social component explained more variance in the trust in the high involvement mode than low involvement mode. Some of the results concur with previous research in both traditional and online WOM. The significance of these results in the extant literature as well their implications for both product review system providers as well tourism and hospitality service providers are discussed in detail. / Business Administration

This dissertation studies the association between CEO ability and various aspects of corporate governance, specifically firm performance, executive compensation contracts and firm opacity. In the first essay of this dissertation (Chapter 2), I examine the effect of CEO ability on firm performance. My analysis uses a unique instrument of CEO ability that is based on a CEO's commitment decisions in US presidential elections. Intuitively, CEO ability is measured based on how well they forecast US presidential elections, one year prior to the race, relative to the candidates expected chances of winning. I find that this instrument of CEO ability is positively related to firm performance. Interestingly, I find that high ability CEOs have a greater impact on Tobin's q in small firms than in large firms. Yet, high ability CEOs have the greatest dollar impact on shareholder value in large firms. In addition, CEO ability appears to be quite important to outside shareholders in high growth firms. Lastly, I find that CEO ability is positively associated to merger announcement returns, which implies that higher ability CEOs engage in value-creating merger activities. The results are robust to industry and time controls, as well as various tests that consider an alternative explanation focusing on political influence. The second essay (Chapter 3) explores the effect of CEO ability on the structure and level of compensation contracts. I find that CEO ability is positively associated with total compensation level. CEOs in the highest quartile of the ability proxy earn almost $2.2 million more than CEOs in the lowest quartile of CEO ability. Further analysis indicates that CEO compensation structure differs markedly between the highest and lowest ability CEOs. Specifically, I find that the high ability CEOs receive 2.1% more stock based incentives than low ability CEOs. Thus, the low ability CEOs receive more of their pay in the form of cash compensation than do high ability CEOs. Further tests indicate that high ability CEOs have significantly greater variance in their pay than low ability CEOs, specifically due to the higher variance in stock based incentives. Overall, I provide evidence that CEO pay is associated with CEO ability and that CEO ability appears a key issue in designing CEO compensation contracts. In the third essay (Chapter 4), I examine whether CEO ability is related to corporate opacity. I argue that high-ability CEOs may seek to create greater transparency to convey their ability to the market. Simultaneously, low-ability CEOs may be signal-jamming the market's inferences about their talent by limiting the available information. An alternative aspect is that the results are driven by low-ability CEOs who seek to work in opaque firms. My analysis indicates that firms with high-ability CEOs are significantly less opaque than firms with low-ability CEOs. These findings are also robust to using a propensity score matched sample. Finally, I show that the deteriorating impact of corporate opacity on firm performance decreases when the decision belongs to a high-ability CEO, suggesting that opacity is not necessarily value-destructing decision for corporations. Overall, my analysis suggests that CEO ability is an important factor for corporate opacity. / Business Administration/Finance